Commerce Commission receives application for EIR Act exemption from Joan Withers
Published26 Jun 2009
The Commerce Commission has received an application from Joan Withers, seeking exemption from section 17 of the Electricity Industry Reform Act 1998, in relation to Mighty River Power Limited's proposal to appoint Ms Withers to its Board of Directors.
Currently Joan Withers is a director of Auckland International Airport Limited which owns the electricity distribution network at Auckland Airport.
Mighty River Power is an electricity generator and retailer. Mighty River Power's generation assets include hydro stations on the Waikato River and geothermal plants in the central NorthIsland. Mercury Energy is the retail arm of Mighty River Power.
Section 17 of the EIR Act is intended to prevent a person being involved both in an electricity lines business and in the generation or supply of electricity, in certain circumstances.
Background
The purpose of the EIR Act is to reform the electricity industry:
to better ensure that costs and prices in the electricity industry are subject to sustained downward pressure;
to ensure the benefits of efficient electricity pricing flow through to all classes of consumers; and
by effectively separating electricity distribution from generation and retail and promoting effective competition in electricity generation and retail markets.
The Commission may grant an exemption only where doing so:
(a) would not result in certain involvements in electricity lines and electricity generation and retail that may create incentives or opportunities:
(i) to inhibit competition in the electricity industry; or
(ii) to cross-subsidise generation or retail activities from electricity lines activities; and
(b) where applicable, would not result in relationships between a business that has involvement in electricity lines and a business that has involvement in electricity generation or retail, where those relationships may not otherwise be at arm's length.
